Canadian Forces Income Support Benefit - Interest Income Exemption

Purpose

This policy provides clarification on applying the interest income exemption when calculating the amount of the Canadian Forces Income Support (CFIS) benefit payable.

Policy

General

1. The maximum amount of the interest income exemption is set out in the Veterans Well-being Regulations.
2. The maximum interest exemption available is $140 per annum or $11.67 per month. This exemption is available to all individual categories of CFIS recipients (i.e. a single Veteran, a Veteran with a spouse or common-law partner, a survivor or an orphan).
3. The interest exemption is applied to net interest income (i.e. gross interest income less any specific deductions permitted under the Income Tax Act.

Other Allowable Deductions

4. Specific allowable deductions under the Income Tax Act include:
   1. carrying charges;
   2. safety deposit box charges;
   3. interest paid on money borrowed to earn investment income;
   4. management or safe custody fees;
   5. accounting fees;
   6. investment counsel fees.
5. The interest exemption is applied to interest income from banks, trust companies, credit unions, bonds, mortgages, annuities, Canada Savings Bonds (CSBs), and CSB bonuses. Where CSBs pay a bonus, only one-half of the bonus is assessable.
6. The interest exemption does not apply to income derived from Dividends or Capital Gains.
7. The application of the exemption to net interest income must not result in total assessable income less than $0.

References

Veterans Well-being Act, sections 37 and 41

Income Tax Act

Veterans Well-being Regulations, section 36